Building Your Down Payment

Lots of people who would like to purchase a new house qualify for several different kinds of mortgages, but they can't afford a large down payment. Do you want to buy a new house, but aren't sure how you should put together a down payment?

Tighten your belt and save. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. You might also try enrolling in an automatic savings plan to have a percentage of your payroll automatically deposited into a savings account. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay local for your vacation.

Sell items you do not really need and get a second job. Perhaps you can find a second job to get your down payment money. You can also get creative about the things you may be able to sell. Maybe you have desirable items you can sell on an online auction, or household goods for a tag or garage sale. Also, you can think about selling any investments you hold.

Tap into your retirement funds. Explore the details of your particular plan. Some homebuyers get down payment money from withdrawing funds from Individual Retirement Accounts or borrowing from their 401(k) programs. Make sure you know about any penalties, the way this may affect on your taxes, and repayment obligation.

Ask for help from generous family members. First-time buyers somtimes get help with their down payment assistance from thoughtful parents and other family members who may be willing to help get them in their own home. Your family members may be willing to help you reach the milestone of owning your own home.

Learn about housing finance agencies. These agencies offer special loan programs to moderate and low income buyers, buyers with an interest in sprucing up a house in a specific area, and additional specific kinds of buyers as specified by each agency. With the help of this type of agency, you probably will be given a below market interest rate, down payment help and other benefits. Housing finance agencies may assist eligible homebuyers with a reduced interest rate, help with your down payment, and provide other assistance. These non-profit agencies to boost the value of homes in specific areas.

Find out about low-down and no-down mortgages.

  • FHA mortgages

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low and moderate-income buyers qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be eligible for a conventional mortgage loan on their own, by offering mortgage insurance to private lenders. Interest rates for an FHA mortgage are typically the going interest rate, while the down payment requirements for an FHA loan are smaller than those of conventional loans. Closing costs may be covered by the mortgage, while your down payment may be as low as 3 percent of the purchase price.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and offers a competitive rate of interest. While the VA does not provide the mortgages, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You can fund your down payment through a second mortgage that closes with the first. Usually the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, rather than having to put together the usual 20% down payment.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her equity. The buyer funds most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually you will pay a slightly higher rate on the loan financed by the seller.

No matter how you gather your down payment, the thrill of reaching the goal of living in your own home will be just as sweet!

Need to talk about down payment options? Give us a call at 9727982110.


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4815 State Hwy 121 Suite 2
The Colony, TX 75056